Agreement in Principle question - FTB

Sunsaru

kisaki757 said:

Hi all,

Looking for some advice as I am a FTB and very new to the whole house buying process. I have a silly question about the negotiation phase.

Say I can borrow a maximum amount based on my income etc. Plus my deposit, it means I can afford to buy for an absolute maximum of X

I am currently looking at properties but I am not necessarily willing to pay the whole amount of X for all of them. For some, I would pay no more than 70% of x for example.

Recently I found a property I like and made an offer. I offered under the asking price which is also under my maximum affordability. Technically I could afford the asking price but I just don't feel it's worth it.

The EA rejected my first offer. I might offer a bit more but they are now asking me for my agreement in principle. But if I show them my AIP they would see my maximum affordability so wouldn't that ruin my negotiating position?

I am just curious if it's normal for estate agents to ask the buyers to provide the AIP before the offer is accepted?

Sorry, I really don't have the first clue how this works!

No point showing them your AIP if they haven't accepted your offer. Only agree to show it if you have an offer accepted. 

TheJP

Sunsaru said:

kisaki757 said:

Hi all,

Looking for some advice as I am a FTB and very new to the whole house buying process. I have a silly question about the negotiation phase.

Say I can borrow a maximum amount based on my income etc. Plus my deposit, it means I can afford to buy for an absolute maximum of X

I am currently looking at properties but I am not necessarily willing to pay the whole amount of X for all of them. For some, I would pay no more than 70% of x for example.

Recently I found a property I like and made an offer. I offered under the asking price which is also under my maximum affordability. Technically I could afford the asking price but I just don't feel it's worth it.

The EA rejected my first offer. I might offer a bit more but they are now asking me for my agreement in principle. But if I show them my AIP they would see my maximum affordability so wouldn't that ruin my negotiating position?

I am just curious if it's normal for estate agents to ask the buyers to provide the AIP before the offer is accepted?

Sorry, I really don't have the first clue how this works!

No point showing them your AIP if they haven't accepted your offer. Only agree to show it if you have an offer accepted. 

Most EAs wont let you offer with out one. Don't cut your nose off to spite your face.

Sunsaru

TheJP said:

Sunsaru said:

kisaki757 said:

Hi all,

Looking for some advice as I am a FTB and very new to the whole house buying process. I have a silly question about the negotiation phase.

Say I can borrow a maximum amount based on my income etc. Plus my deposit, it means I can afford to buy for an absolute maximum of X

I am currently looking at properties but I am not necessarily willing to pay the whole amount of X for all of them. For some, I would pay no more than 70% of x for example.

Recently I found a property I like and made an offer. I offered under the asking price which is also under my maximum affordability. Technically I could afford the asking price but I just don't feel it's worth it.

The EA rejected my first offer. I might offer a bit more but they are now asking me for my agreement in principle. But if I show them my AIP they would see my maximum affordability so wouldn't that ruin my negotiating position?

I am just curious if it's normal for estate agents to ask the buyers to provide the AIP before the offer is accepted?

Sorry, I really don't have the first clue how this works!

No point showing them your AIP if they haven't accepted your offer. Only agree to show it if you have an offer accepted. 

Most EAs wont let you offer with out one. Don't cut your nose off to spite your face.

I'm only going on past experience when I was buying. Didn't have to show nothing till the offer was accepted.

grumiofoundation

For most (all?) of the properties we viewed the agents asked to see our AIP before we could view the property.

I suppose we could have have refused but as above a phrase based on cutting nose spite and face comes to mind.

TheJP

Sunsaru said:

TheJP said:

Sunsaru said:

kisaki757 said:

Hi all,

Looking for some advice as I am a FTB and very new to the whole house buying process. I have a silly question about the negotiation phase.

Say I can borrow a maximum amount based on my income etc. Plus my deposit, it means I can afford to buy for an absolute maximum of X

I am currently looking at properties but I am not necessarily willing to pay the whole amount of X for all of them. For some, I would pay no more than 70% of x for example.

Recently I found a property I like and made an offer. I offered under the asking price which is also under my maximum affordability. Technically I could afford the asking price but I just don't feel it's worth it.

The EA rejected my first offer. I might offer a bit more but they are now asking me for my agreement in principle. But if I show them my AIP they would see my maximum affordability so wouldn't that ruin my negotiating position?

I am just curious if it's normal for estate agents to ask the buyers to provide the AIP before the offer is accepted?

Sorry, I really don't have the first clue how this works!

No point showing them your AIP if they haven't accepted your offer. Only agree to show it if you have an offer accepted. 

Most EAs wont let you offer with out one. Don't cut your nose off to spite your face.

I'm only going on past experience when I was buying. Didn't have to show nothing till the offer was accepted.

Well from experience if a buyer wont prove proccedability and offers 30% below asking id say go save your pocket money until your ready to buy.

These tough guy games do not do you favors, better to be up front and transparent.

Sunsaru

TheJP said:

Sunsaru said:

TheJP said:

Sunsaru said:

kisaki757 said:

Hi all,

Looking for some advice as I am a FTB and very new to the whole house buying process. I have a silly question about the negotiation phase.

Say I can borrow a maximum amount based on my income etc. Plus my deposit, it means I can afford to buy for an absolute maximum of X

I am currently looking at properties but I am not necessarily willing to pay the whole amount of X for all of them. For some, I would pay no more than 70% of x for example.

Recently I found a property I like and made an offer. I offered under the asking price which is also under my maximum affordability. Technically I could afford the asking price but I just don't feel it's worth it.

The EA rejected my first offer. I might offer a bit more but they are now asking me for my agreement in principle. But if I show them my AIP they would see my maximum affordability so wouldn't that ruin my negotiating position?

I am just curious if it's normal for estate agents to ask the buyers to provide the AIP before the offer is accepted?

Sorry, I really don't have the first clue how this works!

No point showing them your AIP if they haven't accepted your offer. Only agree to show it if you have an offer accepted. 

Most EAs wont let you offer with out one. Don't cut your nose off to spite your face.

I'm only going on past experience when I was buying. Didn't have to show nothing till the offer was accepted.

Well from experience if a buyer wont prove proccedability and offers 30% below asking id say go save your pocket money until your ready to buy.

These tough guy games do not do you favors, better to be up front and transparent.

Just to add, I wasn't playing tough I just never had to show anything until my offer was accepted. That happened 4 times. I assumed that's how it went. If I'm wrong then I'm more than happy to retract my earlier comment.

TheJP

Sunsaru said:

TheJP said:

Sunsaru said:

TheJP said:

Sunsaru said:

kisaki757 said:

Hi all,

Looking for some advice as I am a FTB and very new to the whole house buying process. I have a silly question about the negotiation phase.

Say I can borrow a maximum amount based on my income etc. Plus my deposit, it means I can afford to buy for an absolute maximum of X

I am currently looking at properties but I am not necessarily willing to pay the whole amount of X for all of them. For some, I would pay no more than 70% of x for example.

Recently I found a property I like and made an offer. I offered under the asking price which is also under my maximum affordability. Technically I could afford the asking price but I just don't feel it's worth it.

The EA rejected my first offer. I might offer a bit more but they are now asking me for my agreement in principle. But if I show them my AIP they would see my maximum affordability so wouldn't that ruin my negotiating position?

I am just curious if it's normal for estate agents to ask the buyers to provide the AIP before the offer is accepted?

Sorry, I really don't have the first clue how this works!

No point showing them your AIP if they haven't accepted your offer. Only agree to show it if you have an offer accepted. 

Most EAs wont let you offer with out one. Don't cut your nose off to spite your face.

I'm only going on past experience when I was buying. Didn't have to show nothing till the offer was accepted.

Well from experience if a buyer wont prove proccedability and offers 30% below asking id say go save your pocket money until your ready to buy.

These tough guy games do not do you favors, better to be up front and transparent.

Just to add, I wasn't playing tough I just never had to show anything until my offer was accepted. That happened 4 times. I assumed that's how it went. If I'm wrong then I'm more than happy to retract my earlier comment.

Not aimed at you more around the approach the OP is taking. Offering 30% below asking and not willing to provide affordability would be a red flag for me and one I wouldn't entertain. 

CurryGuy

MsACam said:

Do NOT show them! Blank out the amount and leave the contact details of the mortgage broker and tell the broker under no circumstances are they to state your max when they are contacted by the EA and instead they are to confirm the amount you bid, or alternatively get your mortgage broker to issue an AIP for the exact amount you bid (that’s what I did and it took the mortgage broker one day). 

I don't see the need to be so secretive about what the max a lender is willing to give you.

I bought a house recently after offering earlier in the year and i showed them my AIP which was far more than what i offered and it didn't cause any issues. Even if they did try and get me to offer more just because i could afford it's easy to just say no. It's also good for them to see you can afford more so your not stretching yourself which would mean more chance of being rejected when it came to the actual application.

But I'm not sure why you would get an AIP for the exact amount you have bid because the AIP is the amount the bank is willing to lend you and then you add your deposit on top of that so even if the AIP was the exact amount you bid then your deposit on top would show you could afford more anyway. 

csgohan4

benefit of having a broker, if they wanted to check, they could call my broker to confirm. certainly not going to give them my ceiling.